Luxembourg Compensation & Benefits

Luxembourg compensation and benefits management is no easy task. You’ll have to pay employees the right salary on time while complying with all of Luxembourg’s compensation laws. Plus, if a collective bargaining agreement (CBA) covers your workers, you’ll need to adhere to an extra level of compliance.

That’s where Globalization Partners steps in. We’ll handle compensation and benefits for your employees while taking on the risk so that you can focus on expanding your company.

Luxembourg Compensation Laws

Luxembourg does not have a single guaranteed minimum wage (known as Salaire Social Minimum, or SSM) for workers. Instead, rates depend on the employee’s age and job classification. The SSM is around 2,071 EUR a month for unskilled workers older than 18 years old and 2,485 EUR for skilled workers older than 18. Unskilled and skilled adult workers get 100% or 120% of the SSM respectively, while those under 18 years old get 80% or 75% depending on their age.

Luxembourg compensation laws also stipulate overtime rates based on the conditions of the extra hours worked. Each extra hour worked is 40% additional pay for all employees except upper management. Employers must provide one and a half hours of paid rest time per hour of overtime worked.

Guaranteed Benefits

Your Luxembourg benefit management plan should include both required and supplemental benefits. In Luxembourg, guaranteed benefits cover time off during the country’s 10 public holidays and at least 25 working days of paid vacation each year. Time off also depends on any CBAs, which can mandate additional vacation days.

Guaranteed benefits also include health insurance under the state-funded healthcare plan — basic medical coverage that allows Luxembourg employees to choose a doctor, specialist, and hospital. Both employees and employers pay into the program.

Luxembourg Benefit Management

The other part of Luxembourg benefit management is providing any supplemental benefits that employees may expect. For example, while Luxembourg compensation laws do not mandate any 13th-month bonus, employers customarily offer one. Most employers will give this year-end bonus around Christmastime, and some will include half of a 14th-month’s pay.

You can either dole out these benefits yourself or choose Luxembourg benefit outsourcing services. Globalization Partners has connections throughout Luxembourg to help you figure out what other employers are offering and match or exceed their benefits. You can also outsource Luxembourg compensation needs with us. We’ll make sure your employees are paid while keeping your company fully compliant.

Benefits and Compensation Restrictions

A CBA could have restrictions separate from Luxembourg’s compensation laws. You’ll need to check both before drafting an employment contract to ensure your agreement represents the correct amounts.

This material has been prepared for informational purposes only, and is not intended to provide, nor should you rely on it for, legal, tax, or accounting advice in any jurisdiction. You should consult your own legal, tax, and accounting advisors as part of your expansion plans.